For accounting purposes, it makes sense to count programs like Social Security, disability insurance, and Temporary Assistance for Needy Families as government spending. But these kinds of programs are not really government spending because the government does not actually direct how the money is spent. Unlike building a road, for instance, where the government decides that a road should be built and then pays to make it happen, cash benefit programs involve the government distributing money to people and allowing them to decide where to spend it.
At the moment, the hot issue of the 2012 presidential campaign is Medicare, with the Obama and Romney campaigns trading charges and counter-charges over the health-insurance program for the elderly. Since we at the Prospect love clarifying the muddy and making the complex understandable, we thought we'd unpack the arguments the two sides are making and provide some context so we can all grasp this a bit better. We'll start with the campaigns' claims.
Does Mitt Romney actually want to "end Medicare as we know it"?
That's the charge Democrats are now making; here's a video the Obama campaign just released:
At National Journal, Ron Brownstein marshals evidence to show that, despite the large benefits they’ll reap from the Affordable Care Act, white working class voters are convinced that the program will hurt their prospects:
Social Security will run out of funds in 2033—sooner than forecast last year—according to a new government report. Medicare's hospital insurance fund will be gone by 2024. Together, the programs account for 35 percent of all federal spending, and if the trust funds—which are made up of the difference between the payroll taxes paid toward the programs and the benefits doled out—were depleted, benefits would be automatically cut by 25 percent. Social Security's disability insurance faces the soonest expiration—it is now scheduled to run out of money in 2016, two years earlier than projected last year.
Paul Ryan's budget has become a rallying cry for Democrats, and President Obama's re-election in particular. Republicans have long expressed an antipathy for the general concept of government services, but these were often expressed in the abstract or lone exceptions, with the party generally focusing on the starve-the-beast philosophy of reducing taxes so that government outlays would eventually have to be reduced. Ryan's budget gets that down on paper in crystallized form, codifying those ideas into a specific vision for the future that would gut all government services except health spending, Social Security, and an increased budget for defense, discarding the rest of discretionary spending.
The following is the first in a two-part series on Charles Murray's Coming Apart: The State of White America, 1960-2010.
For a generation, the main story of working-class America has been the collapse of a living-wage economy due to such forces as globalization, weakened trade unions, and reduced government labor regulation. This trend has been a social catastrophe and, increasingly, a severe embarrassment to free-market ideology.
Paul Ryan, the supposed champion of fiscal restraint among right-wing Republicans, has put his colleagues in an awkward bind. His budget includes a host of unpopular provisions, and if implemented, would eviscerate almost every part of the government except defense, health care, and Social Security by 2050 according to the Center on Budget and Policy Priorities. Yesterday, all but 10 House Republicans entered their name in the congressional record as supporters of the bill, providing Democrats with ample material for negative campaigning this fall.
I don't know about you, but every time I read the term "Obamacare," I can't help but hear Michele Bachmann's voice saying it, in that singsongy Minnesota accent. But I guess Team Obama thinks I'm in the minority, because they've decided to go ahead and embrace the term. As David Axelrod wrote in an email to supporters, "Can you imagine if the opposition called Social Security 'Roosevelt Security'? Or if Medicare was 'LBJ-Care'? Seriously, have these guys ever heard of the long view?" Which is fine.
If you want to know the priorities behind Paul Ryan’s latest budget, “The Path to Prosperity,” look no further than the line he delivered to the audience at the American Enterprise Institute. “We’ve become a nation of net takers versus makers,” said the House budget chair.
Representative Paul Ryan, chair of the House Budget Committee, plans to unveil his 2013 budget plan this morning, much to the excitement of Democrats and to the chagrin of Republicans, who remember how last year's budget negotiations turned out for them (not well). Although the details of the plan have yet to be released, changes to the tax code and Medicare will be the proposal's big-ticket items.
Today, House Budget Committee chairman and GOP heartthrob Paul Ryan will release his latest budget proposal, and all right-thinking Republicans will line up to express their support (you may remember what happened to Newt Gingrich in May when he criticized a previous version of Ryan's plan and was punished for his heresy, then quickly backtracked). And I have to say, Republicans deserve some credit for this. Not because their plan to privatize Medicare will actually be good for seniors (it won't) or for the budget (it won't). But because in the face of nearly inevitable political damage, they forge right on ahead.
Over the holiday weekend, Talking Points Memo's Brian Beutlerhighlighted this gem of a chart from the Senate Appropriations Committee:
As Hawaii Democratic Senator Daniel Inoyue explained in a statement, "Although non-defense discretionary spending in nominal dollars has increased, when taking inflation and population growth into account the amount contained in the FY 2011 Continuing Resolution represents no increase over what we spent in 2001, a year in which we generated a surplus of $128 billion."
Since Tuesday's election in New York, Paul Ryan has taken to complaining about Democratic "Mediscare" tactics, accusing Democratic leaders of demagoguing his Medicare plan and undermining "necessary" reforms to the program. At yesterday's Fiscal Summit, hosted by the Peterson Foundation, he repeated the charge:
>The 41-year-old House Budget Chairman told the Milwaukee Journal Sentinel on Tuesday morning that he would not seek the U.S. Senate seat now held by Wisconsin Democrat Herb Kohl, saying “it would it make no sense to leave where I am right now because I have such a bigger impact” in the House.
Despite the fact that a deficit-reduction deal probably won’t be reached through the adoption of a comprehensive budget package, lawmakers continue to produce them, tweaking the available deficit-reduction mechanisms to just their liking. So far this week, Sens. Pat Toomey and Kent Conrad have both released budgets, although Conrad’s has yet to go public. What they both show is a response to the backlash to Paul Ryan’s budget and the GOP’s current budget strategy.